Charting the break to ‘clear skies’ territory: S&P 500, Nasdaq tag record highs

Technically speaking, the U.S. benchmarks have taken flight to conclude August, and potentially consequential breakouts remain underway.

Against this backdrop, the S&P 500 has extended its rally to uncharted territory — tagging the 2,900 mark for the first time on record — while the Nasdaq Composite has concurrently reached all-time highs, venturing atop the 8,000 mark.

Before detailing the U.S. markets’ wider view, the S&P 500’s SPX, +0.02% hourly chart highlights the past two weeks.

As illustrated, the S&P has cleared the range top, knifing to all-time highs.

Tactically, the breakout point (2,873) pivots to support. Conversely, a near- to intermediate-term target projects to the 2,924 area, detailed previously.

Meanwhile, the Dow Jones Industrial Average has tagged six-month highs.

The upturn places it atop the 26,000 mark for the first time since February.

Tactically, the former range top (25,888) closely matches the top of the gap (25,882) and pivots to near-term support.

Against this backdrop, the Nasdaq Composite COMP, +0.14% has knifed to record territory, also clearing the 8,000 mark for the first time.

A near-term floor matches the top of the gap (7,976) and is followed by the firmer breakout point (7,933), also illustrated below.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has gapped to uncharted territory, extending its rally from trendline support. Targets project from recent lows to the 8,115, 8,190 and 8,260 areas.

Conversely, first support matches the breakout point (7,933) and is followed by the more important trendline, a level closely tracking the 50-day moving average.

Looking elsewhere, the Dow Jones Industrial Average has extended its break to six-month highs.

The prevailing upturn originates from a mid-month retest of trendline support and the 50-day moving average.

On further strength, additional overhead matches the January post-breakdown peak (26,338) and the top of the January gap (26,435). Also recall that a technical target projects from the August low to about 26,420.

Meanwhile, the S&P 500 has gapped to record territory.

The prevailing upturn originates from major support (2,802) matching the former breakout point. To reiterate, a near-term target projects to the 2,924 area. (Start with the early-August peak and subtract major support: 2,863 – 2,802 = 61 points. Then, add the result back: 2,863 + 61 = 2,924.)

As detailed above, the U.S. benchmarks’ bigger-picture market backdrop continues to strengthen.

On a headline basis, the S&P 500 and Nasdaq Composite have knifed to all-time highs, reaching uncharted territory, capped by no true resistance.

Moreover, the initial selling pressure at record territory has been muted, and when sellers are absent, prices rise to draw sellers.

Moving to the small-caps, the iShares Russell 2000 ETF has extended a previously modest break to record territory.

The breakout resolves a double bottom — defined by the June and July lows — and a near- to intermediate-term target projects to the 175.50 area.

Meanwhile, the SPDR S&P MidCap 400 has knifed more decisively to record territory.

The breakout resolves a bullish ascending triangle, and punctuates a successful test of trendline support. A near-term target projects to the 375 area.

Looking elsewhere, the SPDR Trust S&P 500 has also extended its August rally to record highs. The prevailing upturn punctuates a successful mid-month retest of the breakout point.

Placing a finer point on the S&P 500, the index has gapped to uncharted territory, rising from major support at the mid-August low (2,802).

From current levels, the breakout point marks a well-defined floor (2,873) closely matching the January peak and last week’s close. The initial retest of this area would be expected to draw buyers.

Conversely, the S&P 500’s next target projects from the mid-August low to the 2,924 area, detailed previously.

Much more broadly, the S&P 500 is rising from a jagged, and relatively deep, year-to-date consolidation phase, pinned to the steep 2017 rally. The range spanned 341 points from peak to trough, or about 11.9%.

The prevailing break from this challenging range opens the path to uncharted territory, and potentially meaningful follow-through. Recall that a truly longer-term target projects to the 3,210 area from the 2018 range. (Start with the range top and subtract the 2018 low: 2,873 – 2,532 = 341 points. Then, add back to the breakout point: 2,873 + 341 = 3,214.)

The quality of the prevailing breakout, still underway, will likely add color.

See also: Charting an August breakout attempt, S&P 500 approaches record territory.

The charts below detail names that are technically well positioned. These are radar screen names — sectors or stocks poised to move in the near term. For the original comments on the stocks below, see The Technical Indicator Library.

Drilling down further, the U.S. sub-sector backdrop has strengthened amid still rotational price action. Quickly consider the traditional sector leaders: The transports, financials and technology sector.

To start, the iShares Transportation Average ETF has reached record highs. The prevailing bull flag is a continuation pattern, underpinned by the breakout point.

More broadly, the upturn punctuates a multi-month continuation pattern — illustrated on the three-year chart — opening the path to potentially material follow-through.

As an economically-sensitive sector, the group’s resurgence strengthens the bull case. (Raw materials are transported to manufacturing facilities amid increased economic activity, and then finished goods are re-transported to points of sale.)

Meanwhile, the Invesco QQQ Trust QQQ, +0.19% tracks the Nasdaq 100 and offers a large-cap technology proxy.

As illustrated, the group has knifed to all-time highs, clearing resistance matching the July peak.

Tactically, the breakout point (182.90) is followed by trendline support, a level closely tracking the 50-day moving average, currently 178.20. The prevailing uptrend is firmly intact barring a violation.

Against this backdrop, the Financial Select Sector SPDR XLF, -0.16% is belatedly coming to life.

Specifically, the group has reached five-month highs, amid a volume uptick, escaping a formerly jagged range. Tactically, the former range top (28.50) is followed by the 200-day moving average (27.95) and the group’s breakout attempt is intact barring a violation.

The financials’ resurgence dovetails with the 10-year Treasury note yield’s stabilization near major support, an area detailed last week.

Looking elsewhere, sector participation has also broadened beyond the traditional leaders.

As illustrated, the Industrial Select Sector SPDR XLI, -0.18% has reached five-month highs, rising from a modified double bottom defined by the May and June lows.

The breakout punctuates a successful test of the major moving averages, opening the path to a projected target around 80.00. Conversely, the breakout point (77.00) pivots to well-defined support.

Meanwhile, the SPDR S&P Retail ETF XRT, +0.19% is digesting an August rally to all-time highs.

Tactically, the breakout point pivots to support (51.00) and is followed by the trendline, a level roughly tracking the 50-day moving average, currently 50.20. The group’s uptrend is intact barring a violation.

Beyond the U.S., the iShares Emerging Markets ETF EEM, -0.32% is showing signs of life technically.

Specifically, the shares have rallied from 13-month lows, edging atop trendline resistance on increased volume.

On further strength, major resistance matches the breakdown point (45.10). A close higher would mark a “higher high” more firmly signaling a trend shift.

Conversely, trendline support closely tracks the 50-day moving average, currently 43.55. The prevailing recovery attempt is intact barring a violation.

The table below includes names recently profiled in The Technical Indicator that remain well positioned. For the original comments, see The Technical Indicator Library.

CompanySymbolDate Profiled
Deere & Co. DEAug. 27
Marathon Petroleum Corp. MPCAug. 27
Neurocrine Biosciences, Inc. NBIXAug. 27
Lululemon Athletica, Inc. LULUAug. 27
Delta Air Lines, Inc. DALAug. 24
Hortonworks, Inc. HDPAug. 24
Ligand Pharmaceuticals, Inc. LGNDAug. 24
RingCentral, Inc. RNGAug. 23
Take-Two Interactive Software, Inc. TTWOAug. 23
Splunk, Inc. SPLKAug. 23
Global Blood Therapeutics, Inc. GBTAug. 23
Cisco Systems, Inc. CSCOAug. 22
F5 Networks, Inc. FFIVAug. 22
Boston Scientific Corp. BSXAug. 22
Industrial Select Sector SPDR XLIAug. 22
Universal Display Corp. OLEDAug. 21
SailPoint Technologies Holdings, Inc. SAILAug. 21
Alaska Air Group, Inc. ALKAug. 21
Kimberly-Clark Corp. KMBAug. 15
T-Mobile US, Inc. TMUSAug. 14
Five9, Inc. FIVNAug. 14
Emerson Electric Co. EMRAug. 14
Acacia Communications, Inc. ACIAAug. 13
Zebra Technologies Corp. ZBRAAug. 13
Unit Corp. UNTAug. 13
Best Buy Co., Inc. BBYAug. 10
Avnet, Inc. AVTAug. 10
Clorox Co. CLXAug. 10
Bristol-Myers Squibb Co. BMYAug. 9
United Technologies Corp. UTXAug. 9
Itron, Inc. ITRIAug. 9
Teladoc, Inc. TDOCAug. 9
Paycom Software, Inc. PAYCAug. 8
Zendesk, Inc. ZENAug. 8
Eaton Corp. ETNAug. 8
Kansas City Southern KSUAug. 8
iShares Transportation Average ETF IYTAug. 7
Xilinx, Inc. XLNXAug. 7
Integrated Device Technology, Inc. IDTIAug. 7
Myriad Genetics, Inc. MYGNAug. 7
Health Care Select Sector SPDR XLVAug. 6
American Tower Corp. AMTAug. 6
Cognex Corp. CGNXAug. 6
Phillips 66 PSXAug. 6
KLA-Tencor Corp. KLACAug. 3
Global Payments, Inc. GPNAug. 3
SM Energy Co. SMAug. 3
Venom Energy Partners VNOMAug. 2
Flir Systems, Inc. FLIRAug. 2
Yext, Inc. YEXTAug. 1
SunTrust Banks, Inc. STIJuly 30
Andeavor ANDVJuly 30
Lattice Semiconductor Corp. LSCCJuly 30
Amgen, Inc. AMGNJuly 27
Mosaic Co. MOSJuly 27
Valero Energy Corp. VLOJuly 26
Pfizer, Inc. PFEJuly 25
Northern Trust Corp. NTRSJuly 24
SS&C Technologies Holdings, Inc. SSNCJuly 23
Arconic, Inc. ARNCJuly 23
Taiwan Semiconductor Manufacturing Co. TSMJuly 20
Bank of America Corp. BACJuly 20
JPMorgan Chase and Co. JPMJuly 19
Cummins, Inc. CMIJuly 19
Citrix Systems, Inc. CTXSJuly 18
Corning, Inc. GLWJuly 18
Kulicke and Soffa Industries, Inc. KLICJuly 18
Five Below, Inc. FIVEJuly 17
Sony Corp. SNEJuly 16
Celgene Corp. CELGJuly 16
Walmart, Inc. WMTJuly 16
National Oilwell Varco, Inc. NOVJuly 13
Visa, inc. VJuly 12
Walt Disney Co. DISJuly 12
Paychex, Inc. PAYXJuly 11
RH RHJuly 11
Coca-Cola Co. KOJuly 10
Seattle Genetics, Inc. SGENJuly 9
Johnson & Johnson JNJJuly 5
Kroger Co. KRJuly 5
Silicon Motion Technology Corp. SIMOJuly 3
CyrusOne, Inc. CONEJuly 3
FleetCor Technologies, Inc. FLTJuly 2
Tandem Diabetes Care, Inc. TNDMJuly 2
Oceaneering International, Inc. OIIJune 29
NII Holdings, Inc. NIHDJune 29
BioMarin Pharmaceutical, Inc. BMRNJune 27
Church & Dwight Co., Inc. CHDJune 27
CF Industries Holdings, Inc. CFJune 25
Procter & Gamble Co. PGJune 22
Semtech Corp. SMTCJune 22
Merck & Co., Inc. MRKJune 21
Alphabet, Inc. GOOGLJune 15
Allergan AGNJune 15
Pepsico, Inc. PEPJune 14
Mosaic Co. MOSJune 13
Consumer Staples Select Sector SPDR XLPJune 13
Roku, Inc. ROKUJune 12
Viking Therapeutics, Inc. VKTXJune 12
Medicines Co. MDCOJune 11
Health Care Select Sector SPDR XLVJune 8
Monster Beverage Corp. MNSTJune 7
VMWare, Inc. VMWJune 6
SPDR S&P Biotech ETF XBIJune 5
Kohl’s Corp. KSSJune 5
Union Pacific Corp. UNPMay 21
Twilio, Inc. TWLOMay 21
SPDR S&P Retail ETF XRTMay 15
Lowe’s Companies, Inc. LOWMay 14
PowerShares QQQ Trust QQQMay 10
Coupa Software, Inc. COUPMay 8
Apple, Inc. AAPLMay 7
Norfolk Southern Corp. NSCMay 2
Advanced Micro Devices, Inc. AMDMay 1
UnitedHealth Group, Inc. UNHApr. 30
Nike, Inc. NKEApr. 30
Costco Wholesale Corp. COSTApr. 26
CSX Corp. CSXApr. 26
NetApp, Inc. NTAPApr. 9
Domino’s Pizza, Inc. DPZMar. 21
Burlington Stores, Inc. BURLMar. 14
TJX Companies, Inc. TJXMar. 6
Chart Industries, Inc. GTLSMar. 6
LivePerson, Inc. LPSNFeb. 28
VeriSign, Inc. VRSNFeb. 26
ServiceNow, Inc. NOWFeb. 21
Adobe Systems, Inc. ADBEFeb. 16
Salesforce.com, Inc. CRMFeb. 12
Fortinet, Inc. FTNTJan 19
Sarepta Therapeutics, Inc. SRPTJan. 3
MSCI, Inc. MSCINov. 20
Motorola Solutions, Inc. MSINov. 14
Lululemon Athletica, Inc. LULUOct. 24
HubSpot, Inc. HUBSOct. 4
Nvidia Corp. NVDASept. 27
Bottomline Technologies, Inc. EPAYJuly 13
GrubHub, Inc. GRUBMay 4
Square, Inc. SQMar. 3
Microsoft Corp. MSFTAug. 5

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